House leader suggests quick death for tax plan

The House's second most powerful member suggests the end is near for the Senate plan.

By STEVE BOUSQUET, Times Tallahassee Deputy Bureau Chief
© St. Petersburg Times
published February 12, 2002

TALLAHASSEE -- The Florida House sent its strongest signal yet Monday that the Senate's tax plan will be dead on arrival.

Rep. Johnnie Byrd, R-Plant City, the second most powerful House member and one of its most conservative voices, said he hopes the tax package will reach the House floor without first being debated in committees, as most bills are. That way, most members can cast a vote against it, avoiding a low-profile, death-by-committee vote.

Byrd was speaking in his role as chairman of the House Select Committee on Florida's Economic Future, the panel that has held six hearings in recent weeks to collect public testimony on Senate President John McKay's proposal. The committee held forums in Tampa, Orlando, Pensacola, Panama City, Jacksonville and Miami.

Byrd said opponents outnumbered supporters at every stop.

"The message, loud and clear, is that people believe that their tax system is fair and equitable," Byrd said. "They believe they're already paying enough taxes. I join them in that belief."

Even before McKay procedurally sends his No. 1 priority to a likely killing ground at the other end of the Capitol, he's finding resistance from House members opposed to what they see as giving government more of the people's money.

But McKay wants voters, not legislators, to have the last say. Amid his dire warnings of deepening budget troubles, he wants to cut the sales tax from 6 to 4.5 percent and tax dozens of services that are now tax-free, such as dry cleaning, accounting and pest control.

"I have no corner on good ideas," McKay said. "I will be happy to be part of anything constructive, if it's not a sham or a charade."

At a meeting of Byrd's committee, two economists, one hired by McKay and another hired by House Speaker Tom Feeney, faced off with predictable results.

Without McKay's tax plan, Senate tax expert Hank Fishkind said, it is inevitable that the sales tax rate will have to be increased to 7 percent. He said Florida ranks 49th, with only Texas lower, in the amount of money it spends per person.

Questioned by House members, Fishkind conceded McKay's proposal is far from perfect. He said a proposal to tax truck and waterborne freight shipments could hurt businesses, and he said the plan is "revenue neutral" only in the first year.

"If one wants to call that a tax increase, so be it," Fishkind said. "That's always been the program."

Later, Fishkind said, McKay's promise of revenue neutrality "is a political idea more than an economic idea."

Randy Holcombe, a Florida State University economist and the House's handpicked expert, had a much easier time. Preaching to the converted, Holcombe said Florida's current tax system has worked well and that sales tax collections grew in the 1990s faster than the rate of personal income growth.

"With Florida's current tax structure, Florida's sales tax base is growing faster than Florida's economy," said Holcombe, who is affiliated with the conservative James Madison Institute.

Fishkind countered that the sales tax growth is a result of the last sales tax increase, from 5 percent to 6 percent in 1988.

"What we see as growth in revenue is a function of previous increases in the sales tax rate," Fishkind said.

Noticeably absent from the discussion was any mention of the growing demands on government to build schools, teach immigrant children, train former welfare recipients or provide health care to the working poor. Central to McKay's push for a different tax system is his belief that the current one is incapable of meeting the challenges ahead.

One lobbyist who is leading the charge to defeat McKay's plan, J.M. "Mac" Stipanovich, left Monday's meeting unable to conceal his delight. Whistling and smiling from ear to ear, Stipanovich said he knew of only three lawmakers in the 120-member House who favor McKay's proposal.

When Fishkind said McKay's plan likely would not have prevented Florida's current financial plight, Byrd and others seized on that as another reason to oppose it. Instead, Byrd said, the Legislature should set aside more money in reserve for lean times such as these.

Ominously for McKay, Byrd said: "I think the members are familiar enough to make a vote without having it go through the normal fiscal committees."

-- Times staff writer Lucy Morgan contributed to this report.

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